In mid-2023 Tether, the issuer of a large share of global stablecoins, identified Uruguay as an attractive site for bitcoin mining. The company praised the country for its renewable energy resources and stable grid and said it planned to build operations intended to combine energy production and crypto mining. What followed was a rapid build-out, disagreements over power provision, political changes and ultimately an abandonment of the project.
The venture began with an announcement in May 2023 that Tether would launch bitcoin mining operations in Uruguay. Company leaders cited the country as a "perfect platform" because of apparent energy advantages and a business environment amenable to fintech. Executives associated with the firm were known to visit Uruguay frequently, and company commentary at the time framed the initiative as an initial move to expand mining across South America.
Industry insiders and former contractors involved with the project say Tether invested in two mining sites located in the department of Florida. One former contractor who spoke on condition of anonymity estimated investments of roughly $60 million in each location, amounting to approximately $120 million in total. For a nation where annual foreign direct investment hovers near $2 billion, the deal represented a nontrivial capital commitment.
Early operations and promotional material
Promotional footage released by the company in February 2024 showed rows of small buildings housing computing equipment, with fans on the roofs and wind turbines visible in the distance. Signs around the site used crypto-themed language, capturing an image of a modern, purpose-built mining campus set amid farmland. Those involved with the early phase said the facilities initially operated and generated revenue.
Dispute over power
The turning point for the Uruguay operation was a disagreement with the state utility, UTE, about the interpretation of a power supply clause. One side understood the contract to guarantee a minimum supply of electricity that could later be increased; UTE considered the contracted amount to be a maximum allocation that could not be exceeded. Sources at the utility also said the dispute concerned how much power the local legal entity tied to Tether - Microfin - was entitled to receive.
Internal documents from the utility indicate the disagreement had already begun by November 2024. As mining demand at the sites increased, the facilities experienced days without enough electricity to sustain operations, according to former contractors. The shortfalls affected production and revenue generation.
Political shift and contract impasse
Complicating matters further was a change in Uruguay’s government. A left-leaning administration assumed office in March 2025 and appointed new directors at the utility. Former contractors said these new officials adopted a firmer stance regarding any renegotiation of the energy supply contract.
By June 2025 the local Tether legal entity had ceased paying electricity bills and had informed the utility it intended to terminate its contracts. Both parties explored a revised contract and there was a memorandum of understanding and revised contract texts prepared and approved by the utility’s board. However, representatives of the firm did not attend the signing. With the memorandum unsigned and unpaid bills outstanding, the utility cut power to the mining sites on July 25.
Following that escalation, the company notified Uruguay’s labor authorities on November 25 that it would stop operations and lay off most staff. The local legal entity later settled outstanding debts in December.
Broader context: corporate strategy and mining economics
The Uruguay episode offers a glimpse into how a company with substantial liquid assets and a wide investment portfolio can pursue capital-intensive projects in new jurisdictions. The company has said it has channelled more than $2 billion into energy production and bitcoin mining and controls a large stablecoin balance. Those assets have been leveraged to build a private investment portfolio the company values at about $20 billion, including stakes in data centers and other ventures.
At the same time, the underlying economics of bitcoin mining have become more challenging. A scheduled reduction in bitcoin rewards - the halving event in April 2024 - reduced miners' direct yield from solving blocks. That structural change, coupled with a sharp decline in bitcoin prices from a peak in 2025, squeezed profitability across the sector.
Analysts and industry observers say miners have responded by seeking more efficient hardware, cheaper energy sources or alternative uses for their computing capacity, such as high-performance computing and artificial intelligence workloads. One specialist described the mining industry as extremely dynamic, with operators opening, closing and relocating facilities frequently.
Fit between Uruguay’s strengths and mining needs
Uruguay is noted for reliable electricity and strong internet connectivity, qualities that have attracted interest from technology firms. Yet experts point out that bitcoin mining economics hinge overwhelmingly on access to low-cost power. While Uruguay has a high share of renewable generation, its electricity prices are relatively high compared with other jurisdictions that have become attractive for large-scale mining.
Because of that mismatch, some observers argue the country is better suited to data centers supporting AI and other compute-intensive workloads that value connectivity and grid reliability more than marginally priced electricity. Those observers have concluded that Uruguay may not be viable for mining at scale under current cost structures.
Implications and outcomes
The abandoned Uruguay investment left behind idle facilities and jobs that were later cut. One individual with direct knowledge of the project estimated the likely sunk cost at roughly $120 million. The collapse of the deal underscores how contractual interpretation, regulatory and political change, and changes in underlying market economics can intersect to derail a major foreign investment.
For the firm involved, the Uruguay setback is one part of a broader strategy to redeploy profits into diverse assets. For host countries and utilities, the case highlights the operational and contractual risks that can accompany energy-intensive foreign investments, as well as the potential for abrupt reversals when supply expectations and political alignments shift.
Key Points
- Tether announced two bitcoin mining sites in Uruguay in May 2023 and is estimated to have invested about $60 million per site, for a total near $120 million.
- The project stalled after a contract dispute with the state utility over whether the agreed power allocation was a minimum or a maximum, compounded by a change in government leadership in March 2025 that led to stricter contract stances.
- The economics of bitcoin mining weakened following the April 2024 halving and a fall in bitcoin prices from a 2025 peak, prompting miners to seek efficiency gains or alternative compute uses such as AI workloads.
Risks and uncertainties
- Contract interpretation and supply risk - Misaligned expectations about energy allocations can halt operations in energy-intensive ventures; this primarily affects the energy and industrial sectors.
- Political and regulatory risk - Government changes and new utility leadership can alter incentives and the willingness or ability to renegotiate commercial arrangements; this impacts foreign investment flows and utilities.
- Market and technical risk - Structural changes in bitcoin rewards and price volatility can undermine project economics and push firms to repurpose infrastructure; this has implications for the crypto mining, data center and broader technology infrastructure markets.
Tags: Tether, Bitcoin, Mining, Uruguay, Energy